NSW Long Term Transport Masterplan - April 2012

TRANSPORT FOR NSW

NSW LONG TERM TRANSPORT
MASTER PLAN

SUBMISSION BY
SMART INFRASTRUCTURE FACILITY

27 APRIL, 2012

Contact Details:
Garry Bowditch
Chief Executive Officer

garry_bowditch@uow.edu.au
Ph: +61 2 4298 1241


Contents

1 Executive Summary……………………………………………………………………………………………..3

2 What can a NSW Long-Term Transport Master Plan achieve? ………………………….. 6
3 Setting Transport Infrastructure Performance Benchmarks...................................23
4 Better Integration and Planning …………………………………………………………………………34

5 Better Governance and Regulation…………………………………………………………………….46

6 Lessons for Congestion Charging ……………………………………………………………………….63

7 Public Transport…………………………………………………………………………………………………68

SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 2


Executive Summary
It is critical that the NSW Government, in undertaking a long term transport master plan,
uses the opportunity to give clear and concise commitments to the people of NSW that its
passenger and freight transportation task will see a continual improvement over the
period of the next 20 years. To do that, there is a need for the Government to do what no
other government has been prepared to do in the past, and that is commit to a series of
benchmarks that measure the performance of the transport system and report on it every
year of the plan. Without clear benchmarks of performance and a concrete commitment
to deliver against them, the process of reform will run the risk of being directionless and
consume huge resources without knowing if it is for the betterment of the transport
system.
Regardless of what Transport for NSW does, if there is an absence of objective
performance indicators, then the agency and its actors simply will not know where they
are in the process of change. It is imperative that the NSW transport system adopt a
clearer minded and purposeful reform process, and anchors its activities day to day and
year to year to its objectives and performance metrics. Without these mechanisms,
choosing where to invest and in what becomes little more than relying on chance or luck
to achieve outcomes. Matters of importance like transport investments conducive to
better international competitiveness, improved liveability for the community and
enhanced resilience must be central to the reform process.
The SMART Infrastructure Facility recognises and commends the NSW Government
commitment to do transport planning better and their acknowledgment of the centrality
of the customer in this process. At the same time, Australia and its global city of Sydney is
not a large city compared with the major centres of East Asia, and our place within it is not
assured. Across nearly all metrics relating to the road, rail, aviation and maritime systems
of transport, Sydney has deteriorated in recent decades as the population has grown and
the intensity of economic activity increased. Sydney’s high quality workforce that
connects us to the world spends more time commuting than ever before, as the system
struggles to deal with congestion and lost productivity and amenity.
The Master Plan must build the analytical tools to anticipate and address congestion. In
particular, understanding where and when the emerging tipping points of the transport
system will be and what can be done to avoid dysfunctional performance is an essential
part of the new toolkit needed to manage Sydney for the rest of this century.
Chapter 2 develops the proposition that performance benchmarks are an essential
stepping stone to higher levels of accountability in the management of the transport
system in NSW. We attempt to start the conversation on this important and sensitive area,
and in doing so establish that NSW should set its performance aspirations on at least the
levels achieved in OECD equivalent jurisdictions.
The transition to global best performance will take time, and we recognise that policy
makers must have clear milestones to know if continuous improvement is occurring and to
use these benchmarks to reassure the public that the program of capital expenditure and
maintenance are directed and purposeful towards these benchmarks. A number of
benchmarks are outlined in the chapter however with a particular emphasis on identifying
the key transportation routes across the modes and setting out the travel time



performance improvement that should be achieved at milestones in the 20 year planning
horizon.
SMART is calling for the NSW Government to commit to a reduction in road and rail travel
times along principle routes by 30 per cent by the end of the 2042. For example, a train
journey from Parramatta to Sydney would be complete in 19 minutes (rather than 26
minutes currently), and a car journey from Campbelltown to Sydney Airport in 46 minutes
(rather than 63 minutes currently). These are tangible and purposeful objectives that must
anchor the Master Plan process as a legitimate and meaningful exercise in the eyes of
business and the community.
The importance of better long-term integrated planning is examined in Chapter 3. It is
argued that where the community and business experience high quality urban planning
there is an increased likelihood to a more positive predisposition for investment, growth
and ultimately accommodating larger populations. Larger urban populations coupled with
increasing density can reduce the per capita costs of infrastructure services. The Master
Plan can be reasonably certain that it will have to accommodate a population of at least 7
million people in Sydney by 2050; leading to 500,000 new jobs, tens of millions of square
metres of new commercial space, and a doubling of passenger kilometres travelled each
day. The enduring disconnect between transport and urban planning is unacceptable and
a root and branch reform is required to achieve a more integrated approach to meet these
known challenges.
As a community we must expect a higher level of planning about the future of NSW, and
its place in Australia and the world. Chapter 4 examines the five key principles of good
governance that should drive all future deliberations of integrated transport planning and
management. These are:
i) whole of government planning and coordination;
ii) enhanced accountability; facilitated by
iii) independent review;
iv) increased transparency; and
v) better information and analytics as we know very little about the system of
infrastructure, and if a change is in fact an improvement.
The remainder of Chapter 4 is committed to the importance of setting in place a regime
and culture for outstanding cost benefit analysis to inform better evidence based decision
making. Much needs to be done in NSW in improving the quality and consistency of cost
benefit analysis to shift old mind sets and culture and, ultimately, achieve better
outcomes.
Congestion is the new tobacco for infrastructure and the Master Plan will need to be front
footed in managing it. Chapter 5 sets out the principles and lessons of other jurisdictions
in their endeavours to address the impact of congestion and supporting the enhanced
performance of the transport system.
Finally, we reflect on the tale of three cities about how Vancouver, London and Zurich all
had relatively difficult journeys in planning and delivering on long term transport plans for
their cities. The lessons from these cities are set out to inform ourselves and set realistic
expectations, however the enduring one for Sydney is that it is important that the
community is consulted and engaged in a very meaningful way. The mandate of



governments to change transport systems will always be difficult and Sydney must find its
own unique way of managing the winners and losers and also be clear minded on what it
will compromise on and what it will not. In the end, it’s always about the trade-offs at play
in these cities, and Sydney will need to rise to the challenge of doing the same in a mature,
thoughtful and informed way.

Key Recommendations
- Where projects involve large amounts of government funds, say over $100 million,
such reviews should be conducted in a transparent manner by national or state
auditing offices, the Productivity Commission (if Australian taxpayer money is
involved), or IPART.
- As a general target, NSW should aim to have the best public transport system in
Australia by 2020, and be in the top five OECD countries by 2025.
Roads
- NSW should commit to a target of increasing average speeds at peak AM and PM
times on the 100 busiest arterial roads by 15% by 2022 and a further 15% by 2032.
- Reduce the absolute number of road fatalities and halve the road fatality rate by
2020.
Passenger Rail
- NSW should commit to reducing passenger rail travel trip times by 15% by 2022 and
a further 15% by 2032.
- NSW should commit to increasing the frequency of trains per hour on major routes
by 10% by 2022, and a further 10% by 2032.
Passenger Bus
- NSW should commit to reducing passenger bus travel times by 15% by 2022 and a
further 15% by 2032.
- NSW should commit to increasing the frequency of bus services on major routes, in
particular connecting new growth areas to the existing train network, by 20% by
2022, and by a further 20% by 2032.
Active Travel
- NSW should aim to double the proportion of Active Travel (walking and cycling) for
trips less than 3 km in each of the next four decades, from around 3 per cent
currently to around 50% by 2050. This commitment aims to reduce traffic
congestion, improve human health by lowering obesity and reduce energy
consumption and pollution.
Rail freight
- NSW must commit to separating the passenger and rail freight network in the
Sydney basin as soon as practicable in order to maximise the use of efficient rail
freight transport options and reduce road freight on Sydney’s major road transport
routes.



Chapter 1 What can a NSW Long-Term Transport
Master Plan achieve?

You cannot escape the responsibility of tomorrow by evading it today.
Abraham Lincoln

The NSW Government has released a discussion paper on the development of a long-term
transport master plan for the State (Transport for NSW, February 2012).
The discussion paper poses dozens of important questions about the future of transport
infrastructure for Sydney and regional NSW in relation to customer (commuter) service,
planning, integration of the modes of transport, public transport quality, governance issues,
and funding.
The release of a discussion paper has been an important step in developing the Master Plan
because seeking input from the wider NSW community is essential to securing widespread
and long-term public support. As the COAG Reform Council has noted:
This issue highlights the importance of governments seriously and genuinely engaging the
community and stakeholders in strategic planning so that these visions may be durable,
should governments change. [COAG Reform Council, 2012, p.97].
The discussion paper defines ‘long-term’ as a ‘20 year challenge’. SMART supports a long-
term focus, but considers a 20-year timeframe at the lower end of what would be an
effective timeframe for the Master Plan. In SMART’s view, a more appropriate timeframe
for establishing the framework and implementation of the Master Plan is 30-40 years, from
2013 to 2050.
This is not to say that every new road, bridge and rail track that needs to be built between
today and 2050 should be known today and listed and costed to the last shovel full of gravel
in the Master Plan. It would, obviously, be unrealistic to expect the population in 40 years’
time to accept such a detailed plan made today. And it is near impossible to predict
transport technology four decades into the future. There are also demographic
uncertainties (discussed in Chapter 3). However, what is critical, is to set a clear planning
framework for this long timeframe to better manage the existing asset base and subsequent
additions to the transport capital stock in an integrated system-wide manner over the next
four decades.
The NSW Government has committed to releasing the Master Plan before the end of the
year.
The discussion paper is customer focussed in terms of the questions it seeks to answer,
which is a subtle, but important and welcome change, in the NSW transport public policy
framework. SMART believes that a greater focus on innovation is required to ensure the
Master Plan is more soundly based.



The benefits of transport infrastructure
An underperforming transport system means an underperforming economy and a
frustrated, time-pressed society. A bad transport system costs time and money. But
marginal improvements to the transport system can lead to significant economic and social
gains. A healthy transport system is as vital to society as healthy blood vessels are to the
human body. But, like medicine, we need to better understand our transport system in
order to diagnose and prioritise problems, and find cures.
A key benefit of transport infrastructure, is the reduction in transport costs, largely the
result of time saved. Better transport infrastructure, as well as directly benefitting
travellers, helps create new markets for goods and services, and realize the benefits of
agglomeration. This clustering of businesses fosters competition, spurs innovation, lowers
prices and raises productivity, leading to an increase in living standards.
That said, the benefits from transport investments need to be large to exceed their often
enormous costs. But if done right, infrastructure investment can improve the economy and
benefit NSW’s residents. On the other hand, there is also the potential for massive waste.
If done wrong, infrastructure investment could weaken the economy rather than improve it.
Unfortunately, infrastructure investment in Australia has often failed to maximise social
benefits, or even generate benefits that exceed its costs. The influence of special interests in
the political process can tip the political scales in favour of bad projects.
We must remember that, even though Australia is a rich, developed country, it is by no
means immune from getting poor or negative returns to public or private infrastructure
investment.
SMART welcomes the opportunity to submit to the discussion paper.

Asking the right questions
Why does NSW need to plan its transport infrastructure requirements so far into the future?
Why is it better to plan than to react to the immediate needs of the community? After all,
community needs and transport preferences are unpredictable and subject to unknown
future demographic, economic and social development. There is, therefore, potentially an
enormous cost to investing billions of dollars of today’s resources in transport infrastructure
that either may not be required in the future or not suit future transport preferences. How
can we ensure that taxpayers get value for money, well into the future, from investment
decisions made today? How should these large investments be funded – taxpayer or
directly user-funded?
The answer to the overarching question, ‘what can a long-term transport master plan
achieve?,’ comprises the basis of this submission.



SMART Infrastructure Facility │ Addressing the challenges of the future
Infrastructure in our cities and regional areas, both public and private, faces serious challenges.
There are competing calls for new infrastructure; congested ports, roads and railways stations; stressed energy and water
systems; agreed needs to reduce carbon emissions; and shortcomings in how projects and systems are being procured,
implemented and managed. There is an urgent need to respond to the increasing volatility of our modern times, make better
use of the existing infrastructure and undertake long term planning of these vital systems.
With such a line up of risks and demands there is an obvious and critical need for research into how infrastructure systems
and society’s players interrelate and connect.
To address this matter of national significance funding was provided by both the Australian Government ($35M) and NSW
RailCorp ($10M) to establish SMART. SMART has set out to provide the research, knowledge and tools required for
executing evidence based public policy and investment decision-making.
Our aim is to be a relevant and compelling intellectual partner in the development of infrastructure in Australia and abroad.
SMART has established Australia’s first Professorial chairs in infrastructure governance, infrastructure systems, infrastructure
modelling and simulation, and appointed a professor of infrastructure economics.
A modern and sustainable four storey facility has been established at the University campus, housing 30 integrated
laboratories, simulation and modelling hub, rail logistics research centre and 200 higher degree research students. SMART is
one of the largest facilities of its type in the world.
SMART is working collaboratively with all the University of Wollongong’s faculties, ranging from engineering to law. That
collaboration takes the form of various endeavours from joint academic research to the placing of higher degree research
students from various faculties into the SMART Infrastructure Facility.
Our infrastructure modelling, simulation and visualisation capabilities are assisting industry and government organisations to
better understand their planning and management options.



What is Transport Infrastructure1?

Transport infrastructure is defined as relatively long-lived physical assets such as the road
network (including bridges and tunnels), the rail network used for freight and passenger rail
transport, shipping ports and airports, that provide the means or physical support on which
most economic and social activities rely. A second common characteristic of transport
infrastructure is that any addition to the existing stock is expensive, potentially costing in
the hundreds of millions or billions of dollars. Third, although investment projects typically
focus on individual links, their consequences depend on how they affect what is a highly
meshed transport network, making assessment of those wider effects crucial to rational
decision-making.
Despite these characteristics, investing in transport infrastructure is no different to
investing in any other physical asset. Ultimately, it is a cost like any other, even though the
stream of benefits generated by that investment is exceptionally durable. There is no
virtue in having more infrastructure rather than less; rather, the crucial issue is that the
costs associated with infrastructure be incurred efficiently, that is, in a way that maximises
the net benefits they provide to society. This requires efficiency in the selection of
infrastructure projects, in their financing, deployment and operation, and where user
charges are imposed, in the level and structure of those charges (see chapter 4 of this
submission for further discussion).
It is crucial to get transport infrastructure investment right because, generally, market
forces cannot by themselves repair incorrect decisions. Many transport assets are
extremely expensive and difficult to replicate by the private sector (for example, tunnels
and bridges). Some assets are natural monopolies (for example, some geographically
isolated ports or the public road network).
This means that any under-investment (or over-investment for that matter) in transport
infrastructure does not self-correct via market forces: alternative sources of supply will not
develop, or develop efficiently, if the existing supplier (i.e. the State Government) is
prevented (by a lack of funds for example) from engaging in timely and efficient capacity
expansion. The resulting bottlenecks are therefore likely to impose particularly severe
constraints on economic growth, such as congestion.
1 This discussion is based on Ergas (2011), Better Use Measures, Infrastructure Funding and
Project Prioritisation, SMART Infrastructure Facility, University of Wollongong.

The infrastructure task in NSW today
NSW is Australia’s largest state by population and economic output. Its capital Sydney is a
mid-sized global city of 4.5 million people. Sydney’s importance is derived from its position
as Australia’s largest city and the ninth largest city in the South-East Asian and the South-
Western Pacific region, as the NSW State capital, a significant global gateway for trade and
tourism, and a sporting and cultural capital in the Australasian context.
The growth of Sydney to a global gateway
Without Port Botany and the rail freight network, the Sydney International Airport, the
Sydney Harbour Bridge and the motorway network, Sydney could not be the size it is today
nor carry the economic and cultural significance that it has in its region or globally.



Sydney has grown into its role fairly consistently over the past 100 years, although with
significant transport infrastructure projects allowing capacity and productivity to reach ever
higher levels.
At Federation, NSW was Australia’s largest state by population and Sydney Australia’s
largest city1. But Melbourne was unarguably Australia’s most important city. In Australia’s
first decades Melbourne boasted a larger population than Sydney, was home to the
Australian Parliament and Government, and managed the largest share of Australia’s
international trade through the Port of Melbourne. At least until the Melbourne Olympic
Games in 1956, Melbourne was considered to be Australia’s greatest city and the gateway
to the world.
How did Sydney catch up and then overtake Melbourne? The short answer is via the
provision of significant and productive transport infrastructure capacity such as the Sydney
Harbour Bridge and Port Botany.
In 1901, the horse was still the main form of transport for both people and freight in
Sydney. In fact, horse manure was a major health problem in Sydney and many inner city
suburbs were rife with disease and even suffered from outbreaks of plague. Australia had
2.5 million horses by 1918, and there were quite possibly more horses than people in
metropolitan Sydney in the first decade of the twentieth century. At Federation, the John
Sands Sydney Directory listed 122 retail saddlers and harness makers, 211 coach, carriage
and buggy proprietors, 114 coach builders, and 51 livery stables2.
From Federation until the Depression, Sydney relied primarily on ferries to get across the
Harbour. For example, by 1904 ferries were carrying 19 million passengers each year. By
comparison, 131 million passengers were carried by tram and 30 million by train. The use of
ferries reached a peak in 1927, by then carrying 47 million passengers annually. With the
opening of the Sydney Harbour Bridge, ferry traffic fell rapidly to 20 million annually.
Private and public bus, and tram patronage increased dramatically following the opening of
the Bridge in 19323.
Sydney grew steadily after 1945 adding suburbs in the west and south-west along the Hume
and Great Western Highways. Expansion also continued along the Great Western Highway
towards Penrith. By 2000, when Sydney hosted the Olympic Games, the NSW capital had
become an economic and cultural powerhouse in South-East Asia and the South-Western
Pacific and the centre of trade, financial services, government, culture and sport in the state
of NSW.
NSW suffered a post-Olympics slump and spent most of the first decade of the twenty-first
century in the economic slow lane compared with the other ‘big four’ states of Victoria,
Queensland and Western Australia (Table 1.1).

1
The 1901 census enumerated the population of NSW and Victoria at 1.4 million and 1.2 million respectively.
The most common estimates of the populations of metropolitan Sydney and Melbourne in 1901 are between
450,000 and 500,000.
2
http://www.boardofstudies.nsw.edu.au/archives/ozid/federation1901_4.html
3
This discussion draws on NSW Board of Studies material, accessed at:
http://sydney-harbour-bridge.bos.nsw.edu.au/



Between 2000-01 and 2010-11, the NSW economy expanded by $77 billion, or 22 per cent,
well below long-run trend growth. This expansion compares poorly to the expansions in
Queensland ($84 billion, 50 per cent), Victoria ($80 billion, 35 per cent), and Western
Australia ($68 billion, 57 per cent). Overall, the Australian economy expanded by $345
billion over the decade, or by 35 per cent.
In part, slower growth in NSW reflected a hangover from the pre-Olympics infrastructure
investment in the 1990s. A broader reason was the convergence of per capita income levels
within Australia, aided by the removal of barriers to interstate trade in the late 1980s and
1990s4.
As well, the mining boom expanded opportunities in Queensland and Western Australia,
encouraging the flow of resources to those states. But NSW Government policies also
played a part, acting to restrict economic expansion in the Sydney basin during the first
decade of this century. It can be argued that, as a result of NSW Government policies in
relation to infrastructure during this decade, constraints in transport and energy
infrastructure began to bind as the decade advanced.

Table 1.1 Comparison of decade-average State and Territory GSP growth rates, 2000-01 to 2010-11
%
60
State and Territory decade average GSP growth
50
rates,

40

30

20

10

0
WA QLD NT VIC ACT SA TAS NSW
Source:
ABS 5220.0, Table 1.

Nevertheless, in September 2007, Sydney proudly hosted the APEC Leaders meeting,
attended by the American, Chinese and Russian Presidents, and several other heads of state
and government. The political and security decision to host the Leader’s Meeting in Sydney
was partly driven by logistics. The fact was that there were (and still are) critical
infrastructure limitations in the nation’s capital Canberra – most notably at Canberra’s small
domestic airport and in the quantity and quality of 5-Star hotel accommodation services to
securely host 21 world leaders and their enormous entourages.

4
Although free trade between states is a cornerstone of the Australian constitution, many factors acted to
prevent more interstate commerce prior to the 1990s, such as the high cost of air transport, the poor condition
of national highways (often winding single lane tracks outside of major cities), binding constraints on interstate
electricity interconnectors, and relatively limited credit availability preventing costly interstate migration.



The previous year, in 2006, Melbourne hosted the G20 meeting of Finance Ministers and
Central Bank Governors. This meeting was a logistical success and similar in scale, if not
importance, to the APEC Leaders Meeting. The choice of Melbourne may have been the
result of the fact that the then Treasurer Costello’s home town is Melbourne. However, the
choice of Sydney to host the APEC Leader’s Meeting was probably more to do with Sydney’s
status as Australia’s leading city than the fact that the Prime Minister’s home town was
Sydney.

Sydney in global and regional context
Over the past decade, Sydney has consistently rated in various lists of the top ten most
liveable cities in the world. Criteria generally includes the quality of the private and public
transport system, as well as safety, hygiene, culture, environment, recreation and political
stability. Cities in Sydney’s peer group in terms of liveability include Melbourne, Helsinki,
Geneva, Vancouver, Vienna, Zurich and Toronto.
Metropolitan Sydney covers an area of about 2,800 square kilometres. Geographically,
Sydney is a large city for its population size by world standards. A plausible candidate for
the ‘centre of Sydney’ could be the industrial and freight distribution hub at Wetherill Park
adjacent to the Prospect Reservoir, which is about 30 km from Penrith in the west,
Richmond in the north-west, Campbelltown in the south-west, and about 35 km to Long Bay
(near Port Botany) in the south-east.
Although not technically a ‘conurbation’, the proximity of Newcastle and Wollongong
(including their ports) add to Sydney’s economic productivity by reducing costs (via
economies of scale) in transport and utility (electricity, gas and water) services. More than
three-quarters of the NSW population (around 5.5 of 7.4 million people) live within the
triangle made by connecting Newcastle and Wollongong via Sydney’s coastal edge, and
Penrith on Sydney’s western edge at the base of the Blue Mountains. The ‘height’ of this
triangle, or the distance between Glenmore Park and Vaucluse, is about 70km. The base of
the triangle, the distance between Newcastle and Wollongong, is about 185 km. The area of
the triangle is 6,500 square kilometres.
In terms of population, Sydney is not a large city by world standards, coming in at about 50 th
in terms of the metropolitan (or ‘built-up’) population. Compared with Asian cities to the
north, Sydney is dwarfed by the mega-cities of Jakarta, Hong Kong, Seoul, Tokyo, Shanghai
and Beijing.
Table 1.2 illustrates that Sydney is not a particularly large city in the South-East Asian and
South-Western Pacific region. The two dominant cities, measured by built-up metropolitan
area, are Jakarta and Manilla with populations in excess of 20 million residents. A further
six cities in ‘our region’ are also larger than Sydney, including Bangkok, Thailand (8 million)
and Kuala Lumpur, Malaysia (7.2 million).
Undoubtedly, Sydney is a significantly richer and more amenable city than these megacities
to the north. However, this may not always be the case and will depend on several factors
including the quantity and quality of transport infrastructure investment over the coming
decades.



1.2 Largest Cities (metropolitan areas) in South-East Asia, above 1 million residents
Estimated Metropolitan
Rank Metropolitan Area
Population
1 Jakarta, Indonesia 21,000,000
2 Manila, Philippines 20,000,000
3 Bangkok, Thailand 8,000,000
4 Bangdung, Indonesia 7,414,560
5 Kuala Lumpur, Malaysia 7,239,871
6 Ho Chi Minh City, Vietnam (Saigon) 6,700,000
7 Hanoi, Vietnam 6,500,000
8 Surabaya, Indonesia 5,622,259
9 Sydney, Australia 4,541,849
10 Yangon, Myanmar (Rangoon, Burma) 4,348,000
11 Singapore 4,200,000
12 Medan, Indonesia 4,144,583
13 Melbourne, Australia 4,079,629
14 Cebu, Philippines 2,619,362
15 Davao City, Philippines 2,274,913
16 Phnom Penh, Cambodia 2,234,566
17 Brisbane, Australia 2,047,105
18 Haiphong, Vietnam 1,884,685
19 Perth, Australia 1,718,645
20 Johor Bahru, Malaysia 1,463,800
21 Palembang, Indonesia 1,535,592
22 Auckland, New Zealand 1,486,000
23 Makassar, Indonesia (Ujung Pandang) 1,334,090
24 Adelaide, Australia 1,205,529
memo
Wellington, New Zealand 393,400
Canberra, Australia 361,814
Port Moresby, New Guinea 307,643
Newcastle, Australia 288,732
Hobart, Australia 218,657
Wollongong, Australia 205,847
Dili, Timor Leste 193,563
Townsville, Australia 191,329
Cairns, Australia 150,920
Darwin, Australia 131,209
Sources: ABS 3222.0, United Nations Population Information Network, and Wikipedia. Note: South-East Asia and
the South-Western Pacific is defined as including Australia, New Zealand, PNG, Fiji, Western Samoa, Tonga,
New Caledonia, Philippines, Vietnam, Laos, Cambodia, Myanmar (Burma), Thailand, Malaysia, Singapore,
Timor Leste, Brunei and Indonesia. The definition excludes Taiwan, China (Hong Kong) and Bangladesh.



The stock of transport infrastructure in NSW
The stock of transport infrastructure in NSW includes the state and local government road
network, the federal highway network, the passenger rail network, the rail freight network,
the ports and airports. The NSW taxpayer owns most of the public road and rail networks
across the state. The Australian taxpayer shares funding responsibility for federal highways.
The National Accounts provide estimates for capital stock by industry, for the whole
country. Unfortunately, the State Accounts do not provide similar capital stock estimates.
Table 1.3 shows the estimated national capital stock for the Transport, Warehouse and
Postal industry. At year-end 2010-11, the capital stock in this industry was just under $330
billion.

Table 1.3 Australian Transport, Warehouse and Postal Capital Stock (year-end)
Year $ billions Description
2009-10 (year-end) 316,541 Year-end capital stock
2010-11 31,700 Investment (GFCF)
2010-11 18,690 Consumption (Depreciation)
2010-11 (year-end) 329,551 Year-end capital stock
Source: ABS 5204.0, Table 58. Note: GFCF is Gross Fixed Capital Formation, meaning investment.

Based on this data, a first-pass estimate of the transport capital stock in NSW, based on an
allocation of state GSP shares (ie. state shares of GDP), can be made. In 2010-11, the NSW
share of national GDP was 32 per cent, implying a transport, warehouse and postal capital
stock of $105 billion. However, this estimate may not be accurate because states have
different transport capital requirements depending on geographic size and industry
structure.
Based on total road length relativities across the states (i.e. using road length as an
allocator), the estimated share of the national capital stock would change, with NSW having
a lower share relative to its GSP because of the longer road lengths required in Queensland
and Western Australia to serve larger geographic areas.
Based on AustRoads data (Road Facts 2005), NSW share of total Australian paved road
length is 22%, which is equal to Queensland’s share. AustRoads estimates Victoria’s share
at 19 per cent and Western Australia’s share at 18 per cent. Based on this information, the
value of the NSW transport capital stock is estimated to be around $73 billion. However,
this figure is well below the sum of publicly available estimates of the transport
infrastructure capital stock in NSW (see Table 1.4).



Table 1.4 Replacement value of NSW transport infrastructure
Value of the stock of
transport infrastructure
Transport Mode Stock
($b)
(estimate)
180,000 km of roads
Of which:
Public road network Local 160,000 km
(including value of land State 13,500 km 86.0
under roads) National 4,300 km
5,000 bridges
22 tunnels
3,300 km track
1,700 carriages
Passenger rail network
Over 300 train stations 12.5
(SYD-NEW-WOLL)
1 million passenger
journeys/day
Rail freight network 6,300 km track 7.0
4 large ports
Ports 10.0
2 regional ports
Inter-modal freight
5 1.0
terminals
Total (estimate) - 116.5
Source: RMS, SMART estimates.

What is the return we get for the stock of transport infrastructure assets?
It is important to recognise where Sydney stands today in terms of the efficiency of the
transport network, in order to develop plans for Australia’s largest and most significant city
across the coming decades.
Road network
Based on RTA data, average morning peak speeds in Sydney have generally declined
(worsened) over the decade, although there was a marginal improvement in 2009 and 2010
to 31 km/h across the seven routes from a decade low average of 30 km/h in 2007 and
2008. The low point in 2007 and 2008 is driven by significant slowdowns in the M5/Eastern
Distributor, from 44 km/h in 2006 to 34 km/h in 2008.



Table 1.4 Morning Peak speeds in Sydney, 2004 to 2010
Morning Peak Speeds
2004 2005 2006 2007 2008 2009 2010
(km/h)
F3/Pacific Highway/F1 39 35 38 35 35 35 34
M2/LCT/Gore Hill
36 34 36 38 31 36 40
Freeway
M4/Parra Rd/City W
33 32 31 25 28 29 28
Link
M5/Eastern Distributor 45 39 44 40 34 41 35
Pittwater Rd/Military
28 27 25 27 26 26 25
Rd/F1
Princess Highway 31 28 28 28 28 30 31
Victoria Road 29 22 23 22 23 21 26
Combined seven
34 31 32 30 30 31 31
routes
Source: RTA (2008 and 2011).

SMART examined average commute times in Sydney and London utilising the real-time
Google Maps traffic applications. The average speed study is based on morning peaks, for
the whole trip not just average speeds on major arterial roads, with commutes averaging 60
km across 12 trips, with individual trips ranging from 10 km to 180 km.
Based on this analysis, average commute speeds for Sydney, for trips generally into Sydney
Airport or the CBD, was 40 km/h for the average trip length of 60 km. Average London
speeds were, on average, 54 km/h for the same average trip length of 60 km. Based on this
analysis, London morning peak speeds are 35 per cent faster than Sydney morning peak
speeds (Tables 1.5 and 1.6).

Table 1.5 Sydney morning peak

Source: Google Maps and SMART analysis.



Table 1.6 London morning peak

Source: Google Maps and SMART analysis.

International data can be difficult to compare as standard methodologies differ across
countries. A study by Texas A&M University compared average traffic speeds in US cities by
freeway and arterial road. Freeway speeds across mid-size and large US cities ranged from
the mid-60 to mid-70 km/h. Expectedly, arterial road speeds were lower and range
between 40-45 km/h. Despite methodological differences, it would seem that US city traffic
speeds are higher than in Sydney (see table below).

Table 1.7 US Cities traffic speeds, Texas A&M University estimates

HILDA data (Household Income Labour Dynamics Australia) indicates that Sydney workers
spend more time commuting than workers in other Australian capital cities and the
situation in Sydney is worsening over time. For example, in 2002 the mean commuting time
for a full-time worker in Sydney was 5.4 hours per week, or 32.4 minutes per trip to and
from work. By 2006, the mean commuting time had increased to 5.8 hours per week, or
34.8 minutes per trip. While some of this increase may be the result of people changing to a
more distant job or home, most of the increase is likely to be caused by increased
congestion.



While the increase of 2.4 minutes per trip does not, at first, seem alarming, when multiplied
over the millions of trips taken daily in Sydney, it is plain to see that the cost of additional
travel time could be in the tens of millions of dollars annually.

Table 1.8 Mean commuting times of full-time workers by location (hours), HILDA data

Source: HILDA.

AustRoads compiles weighted aggregate speed data for a sample of arterial roads and
freeways in the major Australian cities and publishes the data by state. Figure 1.1 illustrates
the morning peak speeds across states from 1998-99 to 2008-09. The data reveals a clear
worsening trend in traffic speeds in Australia’s major cities over the decade. NSW began
the decade is last place and finished the decade in last place, showing no relative
improvement in traffic speeds compared with other states.



Figure 1.1 Australian states weighted aggregate speed for sample of arterial roads and freeways in
major cities (km/h) - morning peak

Source: Austroads.

Passenger Rail trip times
A sample of Sydney passenger rail commute times were sourced from the CityRail timetable
(see Table 1.9 below). The times are ‘as scheduled’ or the ex-ante times that presume no
stoppages due to maintenance failures or other problems. SMART has found that, on
average, Sydney rail journeys are 4 km/h faster than road times, saving commuters a little
over 2 minutes on an average 30 km journey.
However, this analysis does not account for walking or driving time from home to station
and from station to work, potentially adding another 10-30 minutes to the commute, nor
does it take account of the constraints imposed on travellers by rail schedules (which may
not align with their preferred travel times). These considerations can often make rail travel
a poor option in terms of time for many commuters. And it hardly needs saying that all
public transport commuters value their time.



Table 1.9 Sydney passenger train travel, morning peak

Source: CityRail and SMART analysis.

The most significant transport infrastructure issues in Sydney in 2012
Most Sydneysiders of 2012 would agree that Sydney suffers from chronic and increasing
congestion, particularly at the entry points into, and out of, the CBD and Sydney Airport.
Some studies (BITRE 2007) have estimated the economy-wide cost of Sydney’s traffic
congestion at $3.5 billion a year (2005 estimate) and this figure is predicted to grow to $7.8
billion by 2020 if present infrastructure is not better managed and new infrastructure well
integrated5. BITRE estimates the ‘avoidable’ cost of congestion, where the net costs of
congestion are positive. Clearly, some amount of congestion would be, overall, beneficial to
society since the infrastructure cost of completely eliminating congestion would be
excessive.
Based on these congestion cost figures, most Sydneysiders would likely argue that there is a
clear case for increased spending on infrastructure.
While the case to tackle congestion might be clear to the commuter heading into the CBD at
the Monday morning peak, it is far from clear where to allocate the next billion dollars in an
attempt to reduce the economy-wide costs of congestion.
The options to address Sydney’s chronic congestion are numerous. Sydney’s Eastern
Distributor (the M1), the M5 East Motorway and the Concord to Lapstone section of the
Western Distributor (the M4), are all congested 13 or more hours a day (RTA).

5
For comparison, BITRE (2007) avoidable congestion cost estimates for Melbourne ($3.0 billion in 2005;
$6.1 billion in 2020), and Brisbane ($1.2 billion in 2005; $3 billion in 2020) we lower than Sydney.



Moreover, most of the main Sydney links – the Harbour crossings, the M5 and the M5 East,
Southern Cross Drive and the M7 – average over 20,000 vehicles per lane daily, which is
close to or exceeds theoretical carrying limits, and other major links (such as the Eastern
Distributor, the M2 and the M4) are not far behind. Yet projections (again, controversial)
are that traffic on the M5 will double by 2031, while traffic generally in the Sydney area will
rise by around 80 per cent (Ergas 2012).

Themes of SMART’s submission
SMART has explored five primary themes in this submission. The five themes are:
- Infrastructure performance benchmarks, transparency and accountability (chapter 2)
- Integrated networks and planning (chapter 3)
- Infrastructure governance, regulation and economic efficiency (chapter 4)
- Congestion pricing (chapter 5)
- Public Transport (chapter 6)
All of these themes are directed towards answering the overarching question – what can a
long-term transport master plan achieve?
SMART submits that the overarching objective of the NSW Long-Term Transport Master
Plan should be to contribute to the maintenance and improvement of the quality of life of
NSW residents. Ideally, government spending on transport infrastructure should promote
the public interest. Infrastructure investment is a vital determinant of our state’s
productivity and, ultimately, the standard of living of its residents. Choosing how to use
limited resources; how much to spend on infrastructure and how to spend it, is no easy task
for governments. Investment options tend to involve complex forecasting and funding
issues, long planning horizons, inherent risk, and conflicting interests.
In other words, at SMART, we believe that the Master Plan must be about finding ways to
ensure that the marginal transport infrastructure dollar is more wisely invested, based on
reliable infrastructure benchmarks, integrated network-wide planning, and a consideration
of economy-wide wellbeing and customer needs. A unified strategic plan is essential to
integrate the often disparate road, passenger rail and rail freight, and port strategies with
population growth forecasts and land use planning.
A related but secondary objective should be to maintain and improve Sydney’s status as a
global city and an Asian economic, political and cultural powerhouse, so long as the first
objective is not compromised by the second. In practice, achieving the first objective is an
excellent way of promoting the second.
Table 1.8 sets out the concordance between questions raised in the Transport for NSW
discussion paper and SMART’s submission.



Table 1.8 Concordances between Discussion Paper and SMART Submission
Section in this
Discussion Paper questions SMART Themes
submission
What should the Master Plan
All themes All chapters
be trying to achieve?
The 20-year infrastructure
Integrated networks and planning Chapter 3
challenge
Integrated networks and planning Chapter 3
Sydney
Public Transport Chapter 6
NSW regions - -
Chapter 3
Freight transport Port Botany
Chapter 4
Economic efficiency, funding &
Funding issues Chapter 4
pricing



Chapter 2 Setting Transport Infrastructure
Performance Benchmarks

An efficient and extensive transportation system reduces the cost of nearly
everything in the economy and enhances the trade, industry, labor, and urban
sectors, which greatly enrich the standard of living in modern society. By
increasing frictions, however, an inefficient transportation system – just like
poorly functioning financial institutions – can cause economic activity to
collapse.
Winston (2011)

An efficient and extensive transportation system reduces the cost of nearly everything in
the economy and enhances the trade, industry, labor, and urban sectors, which greatly
enrich the standard of living in modern society. By increasing frictions, however, an
inefficient transportation system – just like poorly functioning financial institutions – can
cause economic activity to collapse. Winston (2011)
How would we know if the NSW transport system, both as a network as well as the
compartment transport modes of road, rail, ferry and air transport, is improving and to
what target. How would we know whether the stock of transport infrastructure is at the
right level? Or whether the administering government bureaucracy is the right size or
shape? In SMART’s opinion, the Master Plan should address these issues.
The concept of economic efficiency relates to how society uses scarce land, labour and
capital resources to best maximise community wellbeing6. In relation to government
expenditure, efficiency is generally about achieving value for money on behalf of the
taxpayer. Its achievement relies on carefully assessing the costs and benefits of public
expenditure, on a project by project basis.
The theme explored in this chapter is that it is less likely that economic efficiency, or
taxpayer value for money, can be achieved without knowing a great deal about the inputs
(land, labour, capital) and outputs (km travelled, time taken per trip), and the resulting costs
(expenditure) and benefits (reductions in congestion costs, value-added of goods and
services transported), of transport infrastructure at a network or system-wide level.
It is certainly true that there is voluminous published time series data on road and rail
infrastructure (both stock and flow measures), trip times for private and public transport by
route, freight network data etc. But how these data are compiled and interpreted in an
integrated system is critical to the quality of analysis of the NSW transport system.
Ultimately, the question for state treasurers and transport ministers should be where to
spend the next (or marginal) infrastructure dollar to maximise community wellbeing.

6
Economic Efficiency is discussed in detail in Chapter 4 of this submission.



This question cannot be answered without both a ‘helicopter’ and ‘grassroots’ view of the
transport system. Good information, reasoning and analytics, therefore, are vital to
achieving efficiency in the provision of transport infrastructure.
We feel that a dashboard of key infrastructure benchmarks can benefit politicians, policy-
makers, industry players and academics to maintain a consistent focus on agreed long-term
objectives using a consistent language.
Only with better metrics comes improved learning about the transport system. Only with
better benchmarks can we define and agree on the problem we are trying to solve before
undertaking often complex modelling and policy development.
Good benchmarking also requires an understanding of the needs and values of multiple
communities of interest so as to keep all stakeholders engaged. Research needs to be
developed in line with common and agreed national, state and local priorities.
A lack of coherent system-wide datasets is a real impediment to the advancement of
transport infrastructure knowledge and intelligent planning in NSW and Australia more
generally. The advantages are numerous and significant and include, for example, the
potential to develop a better understanding of asset management or to better understand
the characteristics of the Sydney commuter.
SMART recommends that this important work should be undertaken collaboratively and, at
least initially, some of the more data intensive work is often best undertaken by
independent academic research bodies away from the day to day hustle and bustle of
government departments.

From benchmarks to accountability
Setting transport benchmarks for NSW is one thing; holding government agencies and,
ultimately, politicians to account, is another. Experience in the field of economic regulation
has shown a general resistance within government to subject government policies to
regulatory impact statements and rigorous cost benefit appraisal. But where some
independent review has been applied, policies have been better at achieving the
government’s objectives for a minimum use of scarce community resources. No less
important, rigorous, public and transparent evaluation helps avoid the worst mistakes:
Sydney’s Cross city Tunnel contract, for example, would have faced greater obstacles had
proper evaluation of that contract been in the public domain. And last but not least, it can
assist in resisting the pressures that come from rent-seekers and from self-serving demands.
There needs to be a movement towards greater accountability in transport infrastructure
investment and performance but this cannot happen until better system-wide benchmarks
are developed and agreed to by all stakeholders.
Having agreed benchmarks against which governments hold themselves accountable,
means a more results (outputs) oriented system, rather than the current input-focussed
system featuring, for instance, multi-billion dollar announcements that simply assume they
will solve congestion or other transport problems.



Better data, a better market
SMART believes the NSW Government must do more to actively and explicitly shape the
infrastructure market according to its public policy objectives. For instance, the NSW
Government can do more as a ‘market maker’ meaning that it can enhance efficiency via
better connecting market agents, acting as an information broker, which increases
information efficiency in the same way that higher liquidity levels can lower transactions
costs in financial markets. In this way, more and better information will assist in the
creation of a more durable NSW transport infrastructure market.
What this means in terms of government action is to commit to a detailed and fully-funded
long-term transport infrastructure plan, rather than just project lists, and articulate strategic
and enduring objectives for NSW transport.
For Government that means:
- Establishing transport infrastructure benchmarks
- Committing to a long-term infrastructure plan, not just project lists
- Articulate strategic and enduring objectives
- Define infrastructure by outputs not inputs

Together these will help shape the culture and behaviours of the infrastructure market with
much greater clarity and support a deeper engagement from all actors in the infrastructure
market, particularly from private sector funding pools.

Sanctions
SMART supports specific sanctions if transport benchmarks are not achieved.
For government, the ultimate sanction is the ballot box. For this sanction to work, voters
must be informed. All transport metrics and benchmarks must be made publicly available.
For the private sector, financial penalties for non-performance must become the norm for
public-private partnerships, so that risk is shared more appropriately between the private
sector and the NSW taxpayer (discussed further in chapter 4).

SMART Benchmarks
SMART recommends that the NSW Government set accountable benchmarks to the
achievement of international best practice in private and public transport and freight
transport. In other words, the role of public administration needs to be about more than
just identifying good performance benchmarks, the system needs to perform to those
benchmarks.
Future NSW governments must be prepared to clearly articulate the ‘required outcomes’ of
transport infrastructure. These objectives must be strategic, high level, enduring for
decades ahead, insightful and anticipate customer needs.



For example, the Sydney passenger rail network will be at peak saturation in 2012-2013.
How we deal with this problem is dependent on the benchmarks that we set for ourselves in
the long-term. Is the 90 minute train trip from Wollongong to Central Station good enough,
or should we aim to cut that time by 50% to 45 minutes? And if so, by when should this
objective be achieved?
Another example relates to passenger and freight transport. NSW needs to continue to
work towards the separation of freight and passenger services within NSW, so long as
economic and social benefits exceed costs. The separation of the freight and passenger
tasks can potentially increase the rail freight market share in the Sydney conurbation by
between 30-50 per cent. But without a clearly articulated benchmark for rail freight and a
deep understanding of the system-wide impacts of rail freight bottlenecks, we can’t be sure
why, when or how this objective should be achieved.
A final example relates to Active Travel. In SMART’s opinion, the NSW Government should
target an ambitious share for Active Travel (cycling and walking) among transport modes.
This is where innovation and enterprise of the community can be important in finding low
cost solutions to the so called ‘last mile’ problem of infrastructure provision. Targeting a
doubling of the share of Active Travel for trips under 3 km in each of the next four decades
from the less than 4 per cent proportion today. Importantly, this target will need to be
supported by increased investment and maintenance of a safe and efficient city-wide active
travel network and appropriate metrics and benchmarks with which to measure success. It
would be impossible to pursue this objective without the appropriate metrics and
benchmarks to engage the community and government in an open and transparent debate
as to the costs and benefits of supporting more Active Travel.

A dashboard of transport benchmarks
SMART has developed a dashboard of proposed transport metrics to function as
benchmarks for the NSW transport system. We believe that a publicly available suite of
performance benchmarks, committed to by successive NSW governments and widely
available as an easy-to-read dashboard, would contribute significantly to advancing
transport infrastructure policy in NSW.
SMART will commit resources to developing a transport infrastructure dashboard to
promote transparency and forward-planning in transport.
The NSW Government already publishes an extensive array of data on transport
performance. The extracted tables below illustrate some of the information available to
commuters, industry and government.
The first figure is an extract from RMS and shows trip times and average speeds on major
NSW arterial roads across the AM and PM peaks. This data is published quarterly. The
second figure is also an extract from RMS (RTA) and shows the top ten (of one hundred)
busiest roads in NSW that the government is specifically targeting to improve performance.



Figure 2.1 Trips times on major NSW roads, RMS data

Figure 2.2 Top ten busiest roads in NSW, RTA (now RMS)



While all of the data produced by NSW government agencies is useful and, indeed,
essential, this does not go far enough. These metrics need to be transformed into target
benchmarks so the NSW transport policy has a vision and a pathway to improved
productivity.
Tables 2.1 (Road benchmarks), Table 2.2 (Rail benchmarks) and Table 2.3 (Bus benchmarks)
summarise SMART’s proposals for transport benchmarks against which government
agencies, politicians, private sector providers and, ultimately, the NSW community should
measure the success of transport policy.
On all measures, an overriding aim is that NSW should be the leading state in Australia by
2020, and by 2025 achieve the average of the 5 best OECD countries on each measure.
The focus of the benchmarks in the tables below is on transport infrastructure delivering
better outcomes in support of the NSW economy and community wellbeing. Higher
operational (productive) efficiency is a key focus.
The mode-specific measures focus on four key elements: attractiveness, efficiency, quality
and safety.
The attractiveness of travelling is very important to commuters. Travel is a universal
lifestyle activity and its attractiveness should reflect the current living standards, not the
lifestyle of 20 or 30 years ago for example. In relation to public transport, the more relevant
and attractive the mode and ease of switching between modes, the more modal shift may
occur.
Efficiency is the absolute key to controlling infrastructure costs. Getting the most out of the
existing stock of infrastructure is the first step towards the transport sector fostering higher
living standards. Efficiency benchmarks are aimed at increasing productive efficiency,
reducing per capita or per km travel costs. Efficiency is particularly important in the context
of the current, mainly taxpayer, funding model. There is considerable political reluctance to
decrease the significant subsidy to public transport, which constrains large additional capital
expenditure.
An effective and efficient rail system is the priority for improving public transport in Sydney.
However, capital and operational effectiveness needs to be significantly improved so that
the quality of service delivery and price can compete with the car.
There is a need for clarity of strategic purpose for public transport authorities that is about
the customer and that they expect the system to accommodate and work with (not against)
the private motor vehicle.
Improved service quality focuses on improving system reliability whether on roads, rail or
buses. The benchmarks here look to reduce failure rates such as road closures, cancelled
trains and broken down buses.
Ensuring high levels of safety is an absolute pre-requisite for advanced developed societies.
Transport safety levels in NSW transport should aim to be the best in the world in terms of
the lowest number of fatalities and serious injuries caused by system breakdown.
These benchmarks aim to introduce the concept that Australia should try to achieve
performance equal to the average of top tier OECD countries.



We have kept the number of benchmarks to a minimum because having a large number of
measures and developing measures to high granularity often works against improvement as
it increases the ability avoid the really tough improvements.

Table 2.1 Proposed System-Wide and Road Benchmarks
Performance Measure
Key Performance Indicator Benchmark
Road
Attractiveness Average speed - Increase the average speed of the 100 busiest
Travel time roads in NSW, at peak, by 15% in ten years
(2022)
- Increase the average speed of the 100 busiest
roads in NSW, at peak, by a further 15% in
twenty years (2032)
Quality Ride quality - Decrease proportion of roads in poor
condition by 10% by 2020
Target lowest proportion of poor roads in
country
Efficiency Value for money - Increased capital or operating expenditure
improves attractiveness, quality and safety
metrics against benchmarks
- Efficacy of modal interchange (ease of
switching between modes whether by
distance or time)
Road safety Fatalities and serious injuries - Reduce the absolute number of deaths per
year
- Halve the fatality rate by 2020 (deaths per
100,000 trips)
- Target top 5 OECD countries



Table 2.2 Proposed Rail Benchmarks

Performance Measure Key Performance Indicator Benchmark
Rail Rail Rail
Attractiveness Travel time - Rail trip travel times, at peak, to decline
Average Speed by 15% in 10 years (2022)
- Rail trip travel times, at peak, to decline
by a further 15% in 20 years (2032)
Frequency - Increase number of trains per hour by
10% by 2022
- Increase number of trains per hour by a
further 10% by 2032
Quality Reliability - Reduce failures per passenger km by 20%
in 10 years
Complaints - Halve the number of complaints in 5 years
Efficiency PT market share - Reduce subsidy per KM travelled by 50%
in 20 years.
- Efficacy of modal interchange (ease of
switching between modes whether by
distance or time)
Rail Safety Fatalities and serious injuries - Reduce the absolute number of deaths
per year
- Halve the fatality rate by 2020 (deaths per
100,000 trips)

Table 2.3 Proposed Bus Benchmarks
Performance Key Performance
Benchmark
Measure Indicator
Buses
Buses Buses
Attractiveness Travel time - Bus trip travel times, at peak, to decline by 15% in 10
Average Speed years
- Bus trip travel times, at peak, to decline by 15% in 20
years
Frequency - Increase number of buses per hour on major routes by
20% by 2022
- Increase number of buses per hour on major routes by
a further 20% by 2032

Quality Reliability - Reduce failures per passenger km by 20% in 10 years
Complaints - Halve the number of complaints in 5 years
Efficiency PT market share - Reduce subsidy per KM travelled by 50% in 20 years.
- Efficacy of modal interchange (ease of switching
between modes whether by distance or time)

Bus Safety Fatalities and serious - Reduce the absolute number of deaths per year
injuries - Halve the fatality rate by 2020 (deaths per 100,000
trips)



What the Master Plan should seek to achieve (Road and Rail examples)
Table 2.4 Examples of Road Performance Targets
Roads:
2012 2020 2030
Increase the average speed of the 100 busiest
roads in NSW, at peak, by 15% in ten years; and Minutes Minutes Minutes
a further 15% in 20 years

Penrith to Sydney Airport 85 72 61

Newcastle to Sydney Airport 165 140 119

Wollongong to Sydney Airport 94 80 68

Campbelltown to Sydney Airport 63 54 46

Inner City:

Sydney Airport to CBD 31 26 22

Parramatta to CBD 58 49 42

Parramatta to Epping 32 27 23

North Ryde to Manly 53 45 38

Table 2.5 Examples of Rail Performance Targets
Rail:
Increase the average speed on the busiest rail 2012 2020 2030
lines, at peak, by 15% in ten years; and a further Minutes Minutes Minutes
15% in 20 years

Penrith to Central Station 58 49 42

Newcastle to Central Station 165 140 119

Wollongong to Central Station 91 77 66

Campbelltown to Central Station 73 62 53

Inner City:

Parramatta to Central Station 26 22 19

Cabramatta to Central Station 50 43 36

North Ryde to Central Station 40 34 29

Cronulla to Central Station 50 43 36



Figure 2.6

Figure 2.7



Figure 2.8

Figure 2.9



Chapter 3 Better Integration and Planning

Demography is destiny.
Auguste Comte

The transport planning challenge
It is widely accepted that the way in which transport infrastructure is planned in NSW, and
many other jurisdictions, is well below best-practice. Transport infrastructure planning
needs to be undertaken in a more integrated way to address future constraints that might
work to reduce efficiency and limit productivity growth. This is particularly the case in
significant economic zones such as Port Botany where road, rail, maritime and aviation
networks that service the precinct are approaching binding constraints well below peak
demand needs.
These types of issues need to be addressed in a comprehensive, system-wide, as well as
timely manner. This is why it is vital for the NSW Government to move further towards
addressing planning needs across all relevant departments and, indeed, the three tiers of
government.
It is now widely accepted across OECD countries that, in order to maximise taxpayer value
for money, public and private transport infrastructure investment needs to be better
coordinated, better integrated and investment options better evaluated. Further,
governments need better tools to ‘look over the horizon’ and understand community
infrastructure needs decades into the future.
In the Australian context, long-term planning between the three levels of government needs
improvement. Recent COAG reforms and the formation of Infrastructure Australia and
Infrastructure NSW are good reforms, but further gains can still be achieved via instituting
better planning processes across all modes of transport.

Demography is destiny
The often quoted catchphrase demography is destiny is as relevant to NSW as any other
advanced stable democracy. Relatively constant fertility rates, very low and stable infant
mortality, and continued access to advances in life-extending medical technology means
that it is possible to accurately project population levels and distributions decades into the
future.
However, in addition to this comfortably narrow band of demographic uncertainty, there is
a wider band of uncertainty, caused by unpredictable overseas and interstate migration
flows, which are dependent on domestic (federal and state) and foreign economic and
social policies that in turn influence relative incomes and migration patterns.



Based on ABS demographic projections7, Australia’s population could nudge 40 million
people by 2050. Under Series A (the higher migration and fertility scenario), Sydney’s
population would pass 6.5 million in 2040 and be over 7 million residents by 2050.
Assuming continued investment in critical energy, transport and social infrastructure, it is
highly likely that Sydney will remain Australia’s most important city throughout this century.
The population of NSW is projected to grow by 1 million in each of the next four decades,
reaching 8 million by 2020, 9 million by 2030, 10 million by 2040 and 11 million by 2050.
Sydney’s share of the total NSW population is projected to remain relatively constant at just
below two-thirds, while its share of the total Australian population is projected to only
marginally decline from its current share of one in five residents (Table 3.1).

Table 3.1 ABS Population Projections, 2012, and 2020 to 2050 by decade (series A)
Population 2012 2020 2030 2040 2050
Sydney 4,597,949 5,084,611 5,762,506 6,456,613 7,186,862
Balance of NSW 2,705,991 2,977,704 3,328,166 3,651,593 3,958,056
Total NSW 7,303,940 8,062,315 9,090,672 10,108,206 11,144,918
Australia 22,874,044 26,098,377 30,499,959 34,961,511 39,607,981
Sydney / NSW 63% 63% 63% 64% 64%
Sydney /
20% 19% 19% 18% 18%
Australia
NSW / Australia 32% 31% 30% 29% 28%
Source: ABS 3222.0 (Excel data cube) Tables 3 and 4. Population at year ended 30 June. Series A (the high
series) assumes a fertility rate of 2.0, net overseas migration rate of 220,000 per year and life expectancy at
birth (in 2056) of 93.9 years for Males and 96.1 years for Females. Net interstate migration is assumed to be a
constant outflow of 29,000 per year over the projection period, comprising an outflow of 48,000 per year from
Sydney, but an inflow of 19,000 per year into the Balance of NSW.

Federal Treasury’s 2010 Intergenerational Report (IGR) was released in January 2010, 15
months after the release of the ABS projections and a year after the end of the surge net
overseas migration.
The IGR projections fall between the ABS high and medium population scenarios (Series’ A &
B) and projects Australia’s population to be 35.9 million people in 2050. Based on ABS
geographic distributions, this implies a NSW population of 10 million residents and a Sydney
population of 6.5 million residents in 2050. The Treasury projections are reasonably
conservative and, in fact, assume a reduction in the rate of population growth compared to
the last 40 years, from 1.4 per cent to 1.2 per cent per year. And Treasury’s projection of
net overseas migration, which is based on an average ‘absorption rate’ of 0.6 per cent of the
resident population, is well below recent experience (Table 3.2).

7
ABS 3222.0, Population Projections, Australia, 2006 to 2101, released 9 April 2008.



Table 3.2 Population Projections Assumptions, ABS Series A (2008) and IGR (2010)
Australia 2012-2050 ABS Series A (2008) IGR (2010)
Fertility rate (births per woman) 2.0 1.9
at 0.6% of resident
Net Overseas Migration Constant number
population
2012 220,000 138,000
2020 220,000 154,200
2050 220,000 215,400
Life Expectancy at birth at 2056 at 2050
Men 93.9 87.7
Women 96.1 90.5
Population growth rate Rate in year Chart 1 IGR (interpreted)
2012 1.7 1.4
2020 1.7 1.3
2030 1.5 1.2
2040 1.3 1.1
2050 1.2 0.9
Average growth rate 2010-
1.5 1.2
2050
Source: ABS 3222.0 (Excel data cube) Table 1 and IGR 2010 Chart 1 and Section 1.3. Population at year ended
30 June.

The IGR 2010 demographic projections are likely to prove low given Australia’s relative
global economic strength and political and social stability. Moreover, the much improved
opportunities to exploit Australia’s resources endowments over the next several decades (as
a result of the Asian demographic ‘super-cycle’) will require a continued strong demand for
overseas migrant labour.
Because of Australia’s abundant natural endowments in terms of land and resources, and
our relatively very high standard of living, labour demand is likely to remain strong over the
next several decades to maintain this high living standard.
Hence, based on these considerations, we feel that the ABS high series is the most prudent
set of projections on which to base the NSW Long-Term Transport Master Plan, primarily
because the (higher) net overseas migration figure will prove to be the most accurate of all
recent projections.
The Master Plan should, therefore, embrace this demographic destiny and facilitate (rather
than discourage) strong population growth, particularly in the Newcastle-Sydney-
Wollongong-Canberra region to reap the benefits derived via increased economies of scale,
agglomeration, knowledge accumulation, cultural diversity and national security.



Is a Big NSW a bad idea?
Population growth and the idea of a ‘Big NSW’ and in turn a ‘Big Australia’ currently have a
bad rap, despite the potential for a larger population to address a number of our current
infrastructure problems (such as high utility service costs per capita and a relatively low tax
revenue base per square kilometre of inhabited land), and provide wider benefits in terms
of national security (such as maintaining a larger and better equipped military to protect
Australian values).
The populist belief that a larger population spells a decline in urban living standards via
more congestion and higher living costs, has come about, first as a result of significant
underinvestment in energy and transport infrastructure in the 1990s (thus leading to
dramatic declines in service quality), and second, by a significant but misdirected
overinvestment in energy and transport infrastructure in the 2000s (thus leading to
dramatic price rises in the case of energy infrastructure, and further declines in service
quality (more congestion) in the case of transport infrastructure).
The squeezing of the NSW transport infrastructure lemon in the late 1990s and early 2000s
led to community unrest in Sydney by the end of the first decade. This is unsurprising as
governments failed to keep pace with transport demand and cost of living pressures (such
as electricity and water bills) seemed to be correlated with strong growth in population
(Ergas 2011).
Throughout the period of significant underinvestment in transport infrastructure, the NSW
Government also attempted to use regulatory instruments to reduce urban sprawl and,
thus, avoid increased outlays for new suburban roads and rail lines. However, it didn’t
work. And unfortunately, the costs of these regulations hurt lower income groups
disproportionately because the supply of cheaper housing on the urban fringe contracted as
a result of government planning policy (Ergas 2011).
There is nothing inherently undesirable about urban sprawl. Indeed, SMART is not against
extending Sydney’s urban fringe so long as citizens face the true incremental cost of their
decisions and are prepared to pay that full cost. And there is also nothing inherently
desirable about forcing higher density living against the preferences of most residents
(Ergas).
Australia is endowed with an abundance of land and Australian settlement patterns have
reflected this fact. A ready supply of land on the urban fringes combined with historically
poor planning and weak local governments unable to voice the concerns of their local
community, has exacerbated the costs of urban sprawl because the incidence of these
incremental costs has fallen on the whole taxpayer base, rather than new residents at the
urban fringe. Thus, under this policy, new residents get a good deal, and everybody else is
worse off.



Policy distortions leading to urban sprawl1

While SMART is not against urban sprawl, there could be an inefficiently high level of urban
dispersion as a result of existing policies that distort habitation incentives.
The first and probably most important factor is the tax preferences to owner-occupied
housing, which amount to a sizable subsidy to land use as land is a large part of the
purchase price of housing. Second, under-pricing of goods and services that are
complements such as local public goods (schools) and the absence of congestion charges
on roads, which add to the social cost of congestion. Third, institutional structures such as
constraints on local government rates which means there is no incentive for locals to
support increased density which may raise rates revenue.
Given these factors, it is not necessarily inefficient for government to ―lean against‖ urban
sprawl, but the way it‘s done is inefficient. The way governments have pursued denser
settlement patterns has not been ideal. For example, using urban growth boundaries, such
as those implemented in Sydney, may avoid inefficient commuting, but it only does so at
the expense of inefficient use of capital, moreover urban growth restrictions distort the
aggregate supply of housing and shifts the composition to higher cost, higher quality
homes. Cost of policy falls disproportionately on low income houses. Overall, there is a
substantial risk that current policy promoting densification will waste capital and increasing
local congestion in the areas rezoned to denser settlement.
1 This discussion is based on Ergas (2011), Better Use Measures, Infrastructure Funding and Project
Prioritisation, SMART Infrastructure Facility, University of Wollongong.

Australian cities have not resolved the ‘big’ versus ‘sustainable’ population debate. And it
not at all surprising that residents and commuters do not currently accept the sustained
population growth that the large Australian cities experienced during the 2000s. Quite
rightly, residents of Sydney want to see the payoff from an ever increasing population.
While we have argued here that demography is destiny, SMART believes that the
immigration lever, at least outside of recessions, needs to remain at fully-enabled. In our
view, that means an immigration rate of at least 200,000 and rising to 300,000 over the next
four decades needs to be contemplated in order to maximise the productivity gains from
large metropolitan conurbations.
For example, better transport and retail productivity is achieved with a denser population
via economies of scale (PC 2007, Can Australia Match US Productivity Performance).
Further, per household electricity, gas and water costs can be reduced with larger urban
populations. Finally, large efficient metro rail systems usually exist internationally in cities
with populations of 5 million residents or greater (such as in London, New York, Paris and
Santiago).
A broader reason favouring a larger population is that more people of working age can
address the fiscal gap identified in the IGR 2010. And the evidence suggests that immigrants
are complements to high-skilled workers, which is Australian policy to develop a nation of
highly skilled workers.



The alternative of a stagnant or declining population creates significant economic and social
problems. For example, countries with low growth or declining populations must address
more extreme ageing challenges, with greater demands for publicly funded social services,
but a reduced ability to meet these challenges. There are growing concerns about the fiscal
sustainability of some of these countries, such as Italy and Japan.
Thus, even though population growth puts pressure on infrastructure and services, it can be
socially and environmentally sustainable provided governments plan and invest, well ahead
of time, for a larger population.

Magnitude of the infrastructure task
Much of Sydney’s capacity to accommodate population increases while supporting
productivity growth will be dependent on the adequacy and efficiency of its transport and
energy infrastructure, and its housing stock.
All things being equal, given the expected population growth in NSW (from 7.3 million to
11.1 million people) and in Sydney (from 4.5 million to 7.2 million people) between 2012
and 2050, the stock of transport infrastructure in NSW either has to expand, by 52 per cent
in regional NSW and 60 per cent in Sydney, or the productivity of transport infrastructure
must improve by a similar magnitude, or a combination of both.
Because of the size of the transport infrastructure task, simply improving the productivity of
the existing capital stock by 1-2 per cent per year will not cut into the expected increases in
urban congestion over the next four decades.
The population of metropolitan Sydney will be over 7 million people by 2050. Based on
current rates of household formation, this increase would equate to the requirement for
well over 1 million new home sites in Sydney and the Central Coast-Lower Hunter region.
The space to site around 500,000 new jobs equates to tens of millions of square metres of
new commercial, industrial and retail floor space. Like today, these new workers must
commute to new jobs, potentially requiring a doubling of passenger kilometres travelled
annually from 45 billion today to over 90 billion passenger kilometres by 2050. And with the
‘super-cycle’ demographic and economic growth of China, India and Indonesia, we can
expect significantly increased passenger growth at Sydney Airport (based on Mrdak, CEDA
speech).
A further reason why planning is increasingly important, is that the lifespan of major
transport infrastructure in NSW is in the decades rather than years. This means of course
that planning must be ‘in decades’ rather than years. Hence, the relevant timescale for the
Long-Term Transport Master Plan is 30-40 years (ie. from 2012 to 2040/2050), rather than
the shorter “20 year challenge” flagged in the Discussion Paper.
Better Land Use Planning
The Master Plan as a comprehensive and integrated one should explicitly address how land
use planning can play a fundamental and complementary role in improving transport
planning and provision of infrastructure. This is important because a better understanding
of the impact of land uses and of ensuring travel patterns should mean that the transport
planners can have more confidence in identifying appropriate and enduring solutions.



Similarly, a coordinated approach to forecasting land use and transport over an extended
period of time, such as 20 to 40 years, should assist greatly in the delivery of cohesive
proposals across local and strategic boundaries and the impact of changing demographics
and physical environment.
It could be argued that planning to reduce the need for travel is subtly different to planning
to reduce travel. Up until recently, there has not been a real understanding or a conceptual
model of how land use or transport planning can do this. Whilst the two are intrinsically
linked, in the simplest of terms, it could be suggested that reducing the need for travel falls
within the remit of land use planners, whilst reducing travel per se spans both land use
planning and transport planning. Therefore, examining how improving land use predictions
might help to reduce the need for travel may only reveal part of the answer. In order to
gain a more rounded view of the issue it is also necessary to consider how land-use
predictions and transport planning can better inform land use planning activities.
Whilst it may seem unusual, planners and transport professionals do not, intuitively, work
together; and have not done so over the decades. Although this situation is improving,
transport matters are considered to be material to master planning and broader spatial
aspirations, they are however just one of several influences on the planning process. The
same is true of the transport planning discipline, where much work is undertaken with
limited involvement of land use planners. This long established ‘silo based’ approach to
land use and transport does not encourage joint working either in principle or process. This
separation introduces a very real barrier into genuinely useful integrated infrastructure
planning and management.
On the surface it would seem that, even though the time frames may be different, the
information required by transport planners should be consistent with that used by land use
planners. However, a fundamental difference is the definition of land use between the two
processes. Whilst land use planners are concerned with forecasting different types of land
use, transport planners are usually concerned with forecasting land using activities. This
means that though the same sources are used to inform both processes, the data is used
and interpreted in significantly different ways. This difference can and does make effective
land use and transport modelling difficult and, at worst, can make it ineffectual.
A land use (LU) model (illustrated in Figure 3.3) can effectively be seen as a system which
takes given economic and demographic scenarios for the region modelled, and planning
policies for the zones within that region, and produces forecasts of land use by zone for a
future year or years. They do not take account of transport changes, but can be used to
provide inputs to transport modelling.


NSW Long Term Transport Masterplan - April 2012

NSW Long Term Transport Masterplan - April 2012

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NSW Long Term Transport Masterplan - April 2012